ABSTRACT
Under a negotiated 'voluntary' restraint agreement, there is, as in any cartel arrangement, always an incentive to 'cheat' on the quota limits. The internal problems of steelmakers in the Community also worsened the international trade policy crisis. In general, the continuing slump in European steel demand, combined with the restrictions on competition within the Community, reduced market outlets for Community steel producers and created new pressures on firms to increase exports. Whether or not Community producers were guilty of dumping under the existing criteria, the European Commission did not wish to see the matter investigated. Industry Commissioner Davignon threatened a trade war if the government pursued the investigation. Stripping away its idiosyncratic features, the basic purpose of trigger prices was that of any protectionist device: to insulate the domestic industry from foreign competition. A pattern of governmental activity emerged in the wake of the steel agreement that reflected the experience of previous instances of 'voluntary' export restraint.
